If you receive a Tax Return notice, you are required to fill it out and submit it to the HMRC. If you don’t file a Tax Return on time, HMRC may issue a tax bill.
This anticipated cost stands until you file your taxes. After the 31st of January, you have three years to replace the expected bill.
Introduction and any UK-related statistics on Late Tax Filing
If you are required to file a tax return, and miss the deadline for filing it or paying your bill, you may incur a tax penalty. If you are more than 3 months late with your tax return, you must pay a £100 late tax return penalty.
If you also miss this deadline, additional fees are then added on top of this.
For late payments, interest will be assessed. Estimate the penalty for filing your late tax returns and making payments more than three months late. You may appeal a penalty if you have valid justification for doing so.
According to information supplied by HMRC:
- By or on 31st October 2018, 11,665,300 late returns for the tax year 2017-18 with a due date of 31st of January 2019 were issued.
- 576,500 self-assessment submissions included in the amount were submitted after the deadline of January 2019 but before January 2020.
To put it another way, 4.94 percent of tax returns were late as of January 31st, 2019.
What are the penalties for late tax returns?
Time After Due Date:
If you’re late by a day – You will be charged £100.
If you’re late by up to 3 months – You will be charged an additional £100.
If you’re late by up to 6 months – HMRC estimates your Corporation Tax amount and adds a 10% penalty.
If you’re late by up to 12 months – You will be charged an additional 10%.
If you’re late for more than a year – If the form is late by 12 months, you have to pay an extra £300 or 5% of the tax you owe, whichever is greater.
How can you pay the late tax penalty?
You can make direct payments using your online or mobile banking account. Start your tax penalty or inquiry settlement payment when you’re ready.
Choose the “pay with a bank account” option. You will then be routed to your online or mobile banking account to confirm the payment.
There is a non refundable charge for payments made using corporate credit or debit cards. There is no cost for paying with a debit card.
On your paystub, you will need your 14 or 15-character payment reference that starts with X. Your payment may be delayed if the incorrect reference is used.
HMRC will accept your payment on the day you submit it, not when it reaches its account.
As part of HMRC’s efforts to ensure the safety of online payments, they have recently implemented certain modifications.
You must ensure that the information you’re providing is accurate and matches the information stored by your bank or card issuer. For instance, the billing address must match the one associated with your card.
What are some penalties for making mistakes on your tax return?
There exists a system of penalties for tax return errors. Whether or not you are charged depends on whether HMRC believes you were careless or intentionally attempted to misrepresent your income.
- In addition to the amount of tax owing, penalties are depending on the amount of tax owed.
- If you have filled out your tax return with reasonable care, there is no penalty to pay.
- If you have been negligent, the penalty will range from 0% to 30% of the additional tax due.
- The tax penalty for intentionally underestimating your tax liability is between 20% and 70%.
- If you have intentionally understated your tax liability and sought to hide the truth, the penalty will range from 30% to 100%.
What are some reasonable/sound excuses for late tax filing?
There are times when you can’t get your tax return in on time. HMRC will let you off the hook if you have a “reasonable excuse.”
The definition of a reasonable excuse is “something unexpected or out of your control that kept you from meeting a tax obligation.” If HMRC agrees that you had a good reason for being late, they should not charge you for being late.
Here are some examples of valid reasons:
- The recent death of a partner.
- An unplanned trip to the hospital.
- Computer problems, and problems with the online tax services.
- A fire that kept you from filling out your tax return or slowed down the mail.
Each case will be looked at on its own. If you can, you should always file your tax return well before the deadline.
What are some unreasonable/invalid excuses for late tax filing?
All of the following unusual and feeble justifications have been presented by late taxpayers:
- Sadly, my goldfish passed away.
- After hearing about a volcanic explosion on the news, I was unable to focus on anything else.
- My wife refuses to give me my mail.
- The deadline, according to my spouse, is March 31, and I trusted him.
- I’ve been excessively occupied traveling the nation with my one-man show.
All of these individuals and companies got a £100 late tax return penalty from HM Revenue and Customs (HMRC). They unsuccessfully challenged the ruling citing these reasons.
Is it possible to appeal an HMRC tax penalty?
You have the right to appeal any penalties. If a tax penalty is included in a contract settlement, it must be discussed in conjunction with the ultimate settlement amount. The appeal must be filed within 30 days of the date of issuance of the assessment of the penalty is assessed, and it may be assessed at the same time as the actual tax charge.
Generally, you have 30 days from the day the penalty notice was issued to file an appeal. You will get a pamphlet detailing the appeals process with the evaluation.
The SA370 form is accessible on GOV.UK. You may use an online form to contest a £100 penalty for filing a late tax return.
HMRC will give you an additional three months to appeal if the coronavirus epidemic delayed you. This applied to HMRC judgments and fines with dates up to and including September 30, 2021. Beginning on October 1, 2021, typical appeal timeframes will apply.
Have you missed a tax filing deadline & need expert help?
Missed the deadline for the tax return? Remember that you are not alone.
When preparing your late tax return, be organized or you may overpay or underpay tax. Use a separate company bank account and accounting software to monitor revenue and spending throughout the year.
Other tax return recommendations include:
- Save bank statements and receipts.
- Know which valid costs you may claim.
- Check deadlines. Paper returns are due by Oct 31st
- The 31st of January is the deadline for filing taxes online. The preceding tax year ending on the 5th of April must be paid by the 31st of January.
- Allow ample time to file your late tax return to avoid fines.